2001 (4) TMI 347 - AT - Central Excise

Summary

Issues:
1. Disallowance of Modvat credit on certain goods by the Commissioner (Appeals).
2. Determination of eligibility for Modvat credit on specific items under the definition of 'capital goods'.
3. Reconsideration of Modvat credit denial for oil circuit breaker based on recent judgments.
4. Redetermination of eligibility for Modvat credit on flexible pin bush type coupling, grinding disc wear plate, and auto sampler.

Analysis:
1. The appeal challenged the Commissioner (Appeals) order disallowing Modvat credit on goods like dumper, sprag clutch, nylon tyre, hanger castings, and bucket elevator. The Counsel conceded that these items are not 'capital goods' under Rule 57Q and agreed with the disallowance. The Commissioner's decision was upheld for these items.

2. The judgment discussed the eligibility of Modvat credit for the oil circuit breaker. Initially disallowed by the Commissioner (Appeals) based on a previous Tribunal case, the judgment cited a conflicting decision by a Larger Bench regarding the eligibility of electrical items for Modvat credit. The judgment recommended setting aside the disallowance and reexamining the claim based on the guidelines from the recent Larger Bench decision.

3. The issue of flexible pin bush type coupling, grinding disc wear plate, and auto sampler was not challenged before the Tribunal. The Commissioner (Appeals) had remanded these items to the Assistant Commissioner for reassessment of their eligibility for Modvat credit as 'capital goods.'

4. The judgment upheld the disallowance of Modvat credit for certain items like dumper, sprag clutch, nylon tyre, hanger castings, and bucket elevator. However, it set aside the decision on the oil circuit breaker for further review by the Assistant Commissioner. The matter was remanded for a fresh decision, including the items previously remanded by the Commissioner (Appeals). The Assistant Commissioner was directed to provide a hearing to both parties before making a determination.

In conclusion, the judgment modified the Commissioner (Appeals) order, upholding the disallowance of Modvat credit for some items while remanding the decision on the oil circuit breaker and other specific items for further review. The appeal was disposed of through remand for a fresh decision by the Assistant Commissioner.